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Power Checklist

  • Goals and assets have characteristics, and they must be matched and monitored to ensure success.

  • To achieve your goals, you will have to actively manage the risk-reward relationship.

  • As you look at asset allocation, you'll realize that GORP is, in many ways, a form of allocating assets.

  • Dollar cost averaging provides for the systematic purchase of a security in a manner that ensures that you get the lowest average price.

  • The older you get, the more frequently you need to revisit the underlying allocation to make certain that you're not taking too much risk.

  • Standard deviation is volatility of a security relative to other comparable securities. The greater the standard deviation, the further the range is from the mean.

  • The philosophy of passive management is that you put money away in indexed investments. Aside from adjusting changes in your asset allocations based on lifestyle changes or life events, you pretty much leave things alone.

  • The philosophy of active management is that through timely professional management, you can outperform the index.

  • Sometimes you can pick up 2 or 3 percent return simply by repositioning an asset. That means that you may be able to make more with less capital.

  • The lifestyle method of risk management uses three phases of life to determine risk tolerance: accumulation, preservation, and distribution.

  • The lifestyle phases of accumulation, preservation, and distribution are not points in time but states of mind.

  • Regardless of the style of investing and managing risk, it is imperative for couples to agree on their philosophy up front and review it on a regular basis to ensure ongoing consensus.

  • Couples are faced with these compromises regularly, but how they confront and resolve them usually sets the tone for the underlying volatility of the relationship.

  • An integral aspect of retirement planning is the manner in which an estate is protected via a will and other estate planning techniques.

  • Time is our friend when we are looking at retirement issues only if we have a lot of it.



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